SPOKANE, Wash. and CLARKSTON, Wash., June 5 /PRNewswire-FirstCall/ --
Sterling Financial Corporation (Nasdaq: STSA) and FirstBank NW Corp.
(Nasdaq: FBNW) announced today that they have signed a definitive agreement
for the merger of FirstBank NW Corp. (FirstBank) with and into Sterling
Financial Corporation (Sterling). This combination strengthens Sterling's
leadership position in Pacific Northwest regional community banking. As a
leading provider of commercial and community banking services, augmented by
a strengthened branch network, premier banking products and Hometown
Helpful(R) services, this merger positions both companies for greater
success, by building strength on strength.
The transaction, which is valued at approximately $169.6 million, is
expected to close in the fourth quarter of 2006 (pending FirstBank
shareholder and regulatory approval and other customary closing
conditions). The transaction is expected to be accretive to Sterling's
earnings per share in 2007. Cost savings benefits will be derived primarily
from consolidations of back office operations and other related operating
expenses. Sterling expects to consolidate branches in appropriate
locations. These planned consolidations will avoid staff reductions, and
Sterling will endeavor to ensure continuity of production staff in these
communities.
Under the terms of the merger agreement, which has been unanimously
approved by the Boards of Directors of both companies, each share of
FirstBank common stock will be converted into the right to receive 0.7890
shares of Sterling common stock and $2.55 in cash, subject to certain
conditions. Based upon Sterling's closing price on June 2, 2006 of $31.19
per share, the consideration is equivalent to $27.16 per share of FirstBank
common stock.
Based upon financial data for Sterling and FirstBank as of March 31,
2006, and assuming the completion of Sterling's proposed acquisition of
Lynnwood Financial Group, Inc., the financial data of which is as of
December 31, 2005, the combined company will have approximately $9.2
billion in total assets, deposits of approximately $6.1 billion, and loans
of $6.3 billion.
Approval of the definitive agreement by the FirstBank Board of
Directors concludes a process that required the evaluation of numerous
proposals from other potential acquirors, including a major shareholder of
FirstBank, Crescent Capital VI, L.L.C. Each of the proposals received were
evaluated by the FirstBank Board of Directors with the assistance of its
counsel and financial advisors and in conjunction with FirstBank's business
plan to determine the feasibility of each such proposed transaction and
whether it was in the best interests of FirstBank and its shareholders.
Sterling's Chairman and Chief Executive Officer, Harold B. Gilkey,
commented, "We are very pleased to welcome the employees, customers and
investors of FirstBank into the Sterling family. Sterling's consistent and
continued growth over the past ten years reaffirms our belief that building
relationships and taking care of business one customer at a time is how
community banking is done. FirstBank is a superb strategic fit for Sterling
in terms of geography, demographics and client service philosophy, and
represents a unique opportunity to expand our community banking franchise
in our home markets. This merger also represents a growth opportunity to
deepen our footprint and to provide Sterling's Hometown Helpful(R) products
and services to FirstBank's customers, while at the same time solidifying
Sterling's Idaho presence and bolstering market share in the tri-state
region."
According to Clyde E. Conklin, President and Chief Executive Officer of
FirstBank, "We believe this combination is positive for FirstBank's
customers, shareholders and employees. Sterling is highly regarded as a
regional community bank that has succeeded by delivering exceptional
customer service and by working closely with the communities it serves.
This transaction will provide our customers and communities with greater
access to Sterling's comprehensive range of community and commercial bank
products, all with continuing high quality service levels. FirstBank
employees should benefit from expanded resources and deeper support made
available to them as part of a larger financial institution."
Commenting further, Mr. Gilkey stated, "We believe this transaction is
a win-win for the shareholders of both companies. This transaction reflects
our long-range strategic plan of concentrating on our core businesses,
including our ability to diversify loan portfolio opportunities, and
increasing deposit market share across the region."
Sterling and FirstBank will host a conference call for investors,
analysts and other interested parties on Monday, June 5, 2006 at 8:30 a.m.
PT (11:30 a.m. ET).
Participants will include:
-- Harold B. Gilkey, Chairman and CEO of Sterling
-- Clyde E. Conklin President and CEO of FirstBank
-- Daniel G. Byrne, EVP and CFO of Sterling
Investors, analysts and other interested parties may access the
teleconference at 312-470-7400 and use the password "STERLING." A replay
will be available from approximately 11:00 a.m. PT on June 5, 2006 until
July 6, 2006 at midnight PT. The replay number is 203-369-3089. In
addition, Sterling has prepared an Investor Presentation to accompany the
audio call. The presentation is available via the Internet at
http://www.sterlingfinancialcorporation-spokane.com. The Investor Relations site
contains the investor presentation, as well as the link to the audio
webcast for the Friday morning conference call.
FirstBank is being advised in this transaction by Sandler O'Neill &
Partners, L.P. and RP Financial, LC. Sandler O'Neill & Partners, L.P. has
provided advice to Sterling in the past.
ABOUT STERLING FINANCIAL CORPORATION
Sterling Financial Corporation of Spokane, Washington is a bank holding
company, the principal operating subsidiary of which is Sterling Savings
Bank. Sterling Savings Bank is a Washington State-chartered, federally
insured commercial bank, which opened in April 1983 as a stock savings and
loan association. Sterling Savings Bank, based in Spokane, Washington, has
financial service centers throughout Washington, Oregon, Idaho and Montana.
Through Sterling Saving Bank's wholly owned subsidiaries, Action Mortgage
Company and INTERVEST-Mortgage Investment Company, it operates loan
production offices in Washington, Oregon, Idaho, Montana, Arizona, Utah and
California. Sterling Savings Bank's subsidiary, Harbor Financial Services,
provides non-bank investments, including mutual funds, variable annuities
and tax-deferred annuities and other investment products, through regional
representatives throughout Sterling Savings Bank's branch network.
ABOUT FIRSTBANK NW CORP
FirstBank NW Corp. is a savings and loan holding company for FirstBank
Northwest, which offers various banking services in Washington, Idaho and
Oregon. FirstBank's deposit instruments include NOW, money market deposit
and regular savings accounts; treasury, taxes and loans accounts for local
businesses; certificates of deposit; retirement savings plans; and
securities sold under agreements to repurchase. FirstBank also originates
residential mortgage, commercial, agricultural real estate, construction,
consumer, home equity, auto dealer and other non real estate loans. In
addition, it invests in mortgage-backed and investment securities.
Currently, FirstBank operates eight depository offices in Idaho, three in
Washington and nine in Oregon. It also operated six real estate loan
production centers and five commercial and agricultural production centers.
FirstBank NW Corp., formerly known as FirstBank Corp., was founded in 1920
and is based in Clarkston, Washington.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
Sterling intends to file with the Securities and Exchange Commission a
registration statement on Form S-4, and FirstBank expects to mail a proxy
statement/prospectus to its security holders, containing information about
the transaction. Investors and security holders of Sterling and FirstBank
are urged to read the proxy statement/prospectus and other relevant
materials when they become available because they will contain important
information about Sterling, FirstBank and the proposed merger. In addition
to the registration statement to be filed by Sterling and the proxy
statement/prospectus to be mailed to the security holders of FirstBank,
Sterling and FirstBank file annual, quarterly and current reports, proxy
statements and other information with the Securities and Exchange
Commission. Investors and security holders may obtain a free copy of the
proxy statement/prospectus and other relevant documents (when they become
available) and any other documents filed with the Securities and Exchange
Commission at its website at http://www.sec.gov. The documents filed by Sterling
may also be obtained free of charge from Sterling by requesting them in
writing at Sterling Financial Corporation, 111 North Wall Street, Spokane,
WA 99201, or by telephone at (509) 227-5389. In addition, investors and
security holders may access copies of the documents filed with the
Securities and Exchange Commission by Sterling on its website at
http://www.sterlingfinancialcorporation-spokane.com. The documents filed by
FirstBank may also be obtained by requesting them in writing at FirstBank
NW Corp., 1300 16th Avenue, Clarkston, WA 99403 or by telephone at
509-295-5100. In addition, investors and security holders may access copies
of the documents filed with the Securities and Exchange Commission by
FirstBank on its website at http://www.fbnw.com.
Sterling, FirstBank and their respective officers and directors may be
deemed to be participants in the solicitation of proxies from the security
holders of FirstBank with respect to the transactions contemplated by the
proposed merger. Information regarding Sterling's officers and directors is
included in Sterling's proxy statement for its 2006 annual meeting of
shareholders filed with the Securities and Exchange Commission on March 24,
2006. Information regarding FirstBank's officers and directors is included
in FirstBank's proxy statement for its 2005 annual meeting of shareholders
filed with the Securities and Exchange Commission on June 17, 2005. A
description of the interests of the directors and executive officers of
Sterling and FirstBank in the merger will be set forth in FirstBank's proxy
statement/prospectus and other relevant documents filed with the Securities
and Exchange Commission when they become available.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements include, but are not limited to, statements
about: (i) the benefits of the merger between Sterling and FirstBank,
including future financial and operating results, cost savings enhancements
to revenue and accretion to reported earnings that may be realized from the
merger; (ii) Sterling's and FirstBank's plans, objectives, expectations and
intentions and other statements contained in this presentation that are not
historical facts; and (iii) other statements identified by words such as
"expects," "anticipates," "intends," "plans," "believes," "seeks,"
"estimates," or words of similar meaning generally intended to identify
forward-looking statements. These forward-looking statements are based upon
the current beliefs and expectations of the management of Sterling and
FirstBank, and are inherently subject to significant business, economic and
competitive uncertainties and contingencies, many of which are beyond our
control. In addition, these forward-looking statements are subject to
assumptions with respect to future business strategies and decisions that
are subject to change. Actual results may differ materially from the
anticipated results discussed in these forward-looking statements because
of numerous possible uncertainties.
The following factors, among others, could cause actual results to
differ materially from the anticipated results or other expectations
expressed in the forward-looking statements: (1) the businesses of Sterling
and FirstBank may not be combined successfully, or such combination may
take longer, be more difficult, time-consuming or costly to accomplish than
expected; (2) the expected growth opportunities or cost savings from the
merger may not be fully realized or may take longer to realize than
expected; (3) operating costs, customer losses and business disruption
following the merger, including adverse effects on relationships with
employees, may be greater than expected; (4) governmental approvals of the
merger may not be obtained, or adverse regulatory conditions may be imposed
in connection with governmental approvals of the merger; (5) the
shareholders of FirstBank may fail to approve the merger; (6) adverse
governmental or regulatory policies may be enacted; (7) the interest rate
environment may further compress margins and adversely affect net interest
income; (8) results may be adversely affected by continued diversification
of assets and adverse changes to credit quality; (9) competition from other
financial services companies in Sterling's and FirstBank's markets could
adversely affect operations; and (10) an economic slowdown could adversely
affect credit quality and loan originations. Additional factors, that could
cause actual results to differ materially from those expressed in the
forward-looking statements are discussed in Sterling's and FirstBank's
reports (such as Annual Reports on Form 10-K, Quarterly Reports on Form
10-Q and Current Reports on Form 8-K) filed with the Securities and
Exchange Commission and available on the SEC's website at http://www.sec.gov. The
documents filed by Sterling, may also be obtained free of charge from
Sterling by requesting them in writing at Sterling Financial Corporation,
111 North Wall Street, Spokane, WA 99201, or by telephone at (509)
227-5389. In addition, investors and security holders may access copies of
the documents filed with the Securities and Exchange Commission by Sterling
on its website at http://www.sterlingfinancialcorporation-spokane.com. The
documents filed by FirstBank may also be obtained by requesting them in
writing at FirstBank NW Corp., 1300 16th Avenue, Clarkston, WA 99403 or by
telephone at (509) 295-5100. In addition, investors and security holders
may access copies of the documents filed with the Securities and Exchange
Commission by FirstBank on its website at http://www.fbnw.com.
Sterling and FirstBank caution that the foregoing list of factors is
not exclusive. All subsequent written and oral forward-looking statements
concerning the proposed transaction or other matters attributable to
Sterling or FirstBank or any person acting on their behalf are expressly
qualified in their entirety by the cautionary statements above. Sterling
and FirstBank do not undertake any obligation to update any forward-looking
statement to reflect circumstances or events that occur after the date the
forward-looking statements are made.
SOURCE FirstBank NW Corp.
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Related links:
http://www.sterlingfinancialcorporation-spokane.com/
http://www.fbnw.com/
CONTACT:
investors, Harold B. Gilkey, Chairman and
Chief Executive Officer, +1-509-354-8186, or Daniel G. Byrne,
EVP, Chief Financial Officer, +1-509-458-3711, or Marie Hirsch,
AVP, Director of Investor Relations, +1-509-354-8165; or media,
Jennifer Lutz, Public Relations Specialist, +1-509-458-2711, Ext.
6545, all of Sterling Financial Corporation; or Clyde E. Conklin,
President and Chief Executive Officer, +1-509-295-5100, or Larry
K. Moxley, EVP Chief Financial Officer, +1-509-295-5100, both of
FirstBank NW Corp.
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